Extending Social Security to the Poor

Extending social security to the rural poor
Natalia Winder Rossi,
Social Protection Team Leader, Senior Adviser, UN-FAO

Understanding the needs of the
rural poor, the barriers they face
in accessing social protection
and identifying innovative
opportunities to address them

Access to social protection
Social Protection: From Protection to Production
• Countries committed to ensure coverage of social protection to all (SDG 1.3)
• Coverage across all components of social protection: social assistance, social security and
labor market policies
• Progress in terms of expansion of social protection programmes over the last two decades,
But…
Only 45 per cent of the global population is effectively covered by at least one social benefit,
while the remaining 55 per cent– 4 billion people – are left unprotected. (ILO 2018)
• Social assistance transfers have the broadest coverage in rural areas. Social insurance is
limited.
• Around 56% of the rural population remains without legal health coverage, as compared
to 22% in urban areas.
• In South Asia and Sub-Saharan Africa, the share of poorest quintile receives social
assistance in 20-30% (70% in LAC)
• In India, 90% of the agricultural sector is informal; in Lebanon, agricultural is seasonal
and not formalized within labor legislation

Barriers to access to social security
Rural populations are often excluded by design or implementation from existing
social protection schemes:
• Legal barriers:
• in 2013, only 1/3 of countries had SP schemes that were established
by law and covered all SP contingencies (ILO)
• Some schemes are not inscribed in legislation – hence harder to
claim rights
• Some categories are specifically excluded –particularly farmers and
non-formal workers under social insurance schemes
• Additional factors may disadvantage informal workers&produce legal
exclusion or ineligibility e.g. lower levels of benefits
• Non-contributory schemes are mostly not directly anchored in any
legislation
• Financial barriers:
• Low contributory capacity
• Irregular and unpredictable incomes
• Cost of affiliation and demonstrating compliance

Barriers to access to social security
Rural populations are often excluded by design or implementation from existing social protection schemes:
• Institutional and administrative barriers
• Low administrative capacity
• High transaction cost to expand to rural areas and limited accessibility of services in rural settings
• Heavy administrative procedures and processes
• Limited awareness or knowledge of social protection programmes
There is often reluctance to expand schemes:
• Concerns regarding ‘dependency’; focus on ag policies and not discussing social and risk management strategies

Some options to explore….
• Visibility
• Nature and scope of coverage gap (how many? How?
What are the specific barriers?)
• Who are the rural poor? What are their
characteristics and needs?
• Farmer registries, with socio-economic variables

• Small-scale fishers:
• Self-employed, fish for own consumption/ sale in local markets, vessel-based fishers; cleaners; pre-
and post-harvest workers; informal; provide employment in rural costal areas
• Face natural/ environmental, economic, health, social and political risks
• Challenges for extending SP to small-scale fishers
• Poor fit between conventional modalities of social security systems and the realities of SSF sector-
need for regular prior contributions and worker registration
• Concerns about affordability of extending coverage to SSF
• Lack of up-to-date information about the size and socio-economic characteristics of the sector
• FAO’s work on social protection in fisheries
• Strengthen the economic case to expand and scale up social protection systems – mapping of SP
coverage for SSF and building case for expansion and TA to governments (Lebanon with FR)
• Promoting coherence between social protection and fisheries policies and programmes for
- Improving the management of natural resource of SSF
- Supporting SSF’s livelihoods: fishery value chain and/ or transition to alternative source of
income
- Strengthening risk management and response to shocks impacting SSF. E.g. Myanmar, Senegal
and Brazil
7
Zooming in: Social protection and fisheries

• About 1.6 billion people worldwide depend on forests for their livelihoods and 300
million people live in forests (WWF, 2018)
• Around 90% of the 1.2 billion extremely poor depend on forests for their
livelihoods (WB, 2004)
• Forest dependent communities face specific social and economic risks and
vulnerabilities which require focus on coverage and adequacy of social protection
instruments
• Dependent on forests for their livelihoods; often indigenous peoples/ethnic
minority
• In terms of coverage, forest dependent communities are not systematically
included in social assistance programmes and/or not eligible to access
insurance mechanisms given limited formalization
• In terms of adequacy, programmes are not designed responding to the
specific vulnerabilities and needs of forest dependent communities
• Expanding SP coverage for FDCs
• Building on existing or providing new public sp programmes
• Learning from and utilizing Forest Producer Organizations
• Developing hybrid schemes that simultaneously provide sp for FDCs and
promote forest conservation
8
Zooming in: Social protection and forestry

Others options to explore….
• Adapting existing schemes to the needs of rural population
• Defining and adopting inclusive legal frameworks
• Alternative protection modalities, which are flexible and take into account the diversity of the
informal sector and their specific characteristics, eg (mutual funds, farmer funds, etc)
• more flexible contribution payments to take into account income fluctuations or seasonal revenues
• introducing specific mechanisms to determine contribution levels for employees and self-employed workers
where real incomes are difficult to assess (capitation or lump-sum payment based on size of economic
activity, on area cultivated, etc.);
• Introducing subsidized pillars or contributions
• Reforming administrative procedures towards simplification and digitalization
• Introducing components into existing schemes to make them more relevant for rural populations
• Establishing special schemes that respond to the needs of different segments of the rural population
• Social insurance schemes- e.g. China’s social insurance for the elderly and health insurance schemes
• Social assistance schemes – e.g. India’s National Rural Employment Guarantee Scheme

Social protection coverage: Rural Youth
• In terms of coverage- looking at child grants (only), continues to be limited and many of these do not cover adolescents/youth
• Only 35 per cent of children worldwide enjoy effective access to social protection, albeit with significant regional disparities. Almost two-thirds of children globally – 1.3 billion children – are
not covered, most of them living in Africa and Asia. (ILO 2018)
• Very few programs that are specifically targeted to youth, focused on specific needs as they enter labor market- with the exception
of some contributory programmes
• As only 21.8 per cent of unemployed workers are covered by unemployment benefits, 152 million unemployed workers remain
without coverage. Unemployment benefits for first-time job seekers- limited (ILO 2018)
• Evidence (*UNICEF) on the impact of national cash transfers in adolescent well being and risk; access to secondary education, but
limited analysis on access to jobs/markets
Many outstanding questions:
• What happens to children (18+) that graduate from social assistance programmes? Links to job intermediation, skill training and
specific support?
• How many and what type of jobs (farm & off-farm) need to be created in rural areas to absorb new labour market entrants?
• Tools and Investment: what needs to be done to ensure decent jobs in rural areas, quality education and training, and better
matching of labour supply and demand?
• Policy Coherence: What are the most effective policies to harness the development potential of decent employment in order to
create sustainable livelihood options in rural areas?

Elderly
Rural ageing population (Data: ILO 2018 report)
• “Worldwide, 68 per cent of people above retirement age receive an old-age pension, which is
associated with the expansion of both non-contributory and contributory pensions in many middle-
and low-income countries”. But..
• Policy concerns/perceptions persist: Pensions do not reach poorest in rural areas; too many barriers to access
• In most low-income countries, less than 20 per cent of older persons over statutory retirement age
receive a pension.
• Health coverage: in rural areas where 56 per cent of the population lack health coverage as
compared to 22 per cent in urban areas.
• Implications of limited to pensions not only in terms of well being of ageing households but also in
terms of access to land for youth

Universal social pensions for older persons are feasible and can be financed by governments of low- and middle-income countries
(source: ILO 2018)
• China
• Before 2009, two institutional mechanisms for income security in old age : 1) for urban workers based on social insurance principles, 2) for civil
servants and others of similar status based on the employer liability approach. Together they covered in 2008 under 250 million people
(including pensioners), or about 23 per cent of the population aged 15 and above.
• Following a series of reforms, an old-age pension scheme was established for the rural and urban populations not participating in the social
insurance scheme. In 2015, 850 million people were covered under the pension system; by 2017, universal coverage had been achieved.
• Brazil
• The old-age pension system integrates contributory, semi-contributory and non-contributory schemes which cover both public and private
sector workers as well as smallholder farmers and rural workers.
• The non-contributory social assistance grants are means-tested benefits for people aged 65 or over and persons with disabilities.
• The system has nearly universal coverage, as 80.2 per cent of those aged 65 and over received a pension in 2014. Benefit levels are equal to
the minimum wage for smallholder farmers and rural workers and those receiving the social assistance pension.
• Lesotho
• Lesotho has a larger share of older people than many countries in sub-Saharan Africa- over 4 per cent of its population above the age of 70.
• All citizens over 70 years of age are entitled to a monthly old-age pension of about US$40- the largest regular cash transfer in Lesotho,
covering about 83,000 persons.
• It is estimated that many more benefit indirectly. The OAP costs about 1.7 per cent of GDP and is financed by general taxation.
• Complementary services and transfers provided as part of the national social protection system such as subsidized or free primary health care
at government health centres and government hospitals, and a cash grant administered by local governments for those deemed “needy”.
12
National experiences

Summary
Rural ageing population (Data: ILO 2018 report)
• Accelerating progress towards SDG 1.3 requires an explicit focus and effort on ensuring adequate
access in rural areas
• Identifying life-cycle vulnerabilities are key, and thus the definition of a System that addresses these.
BUT also, consideration livelihood vulnerabilities in the design of components of the systems to
ensure real impact of social protection in rural areas
• Expansion but also adequacy (applicable to both social assistance and security)
• Data continues to be limited as well as some of the monitoring tools used: focusing on social
programmes, and not always including agricultural/rural development policies that are also serving
SP function (Inputs subsidies, unemployment insurance for fishers, etc.)
• And ultimately, seeking greater coherence between SP and broader rural development policies

Extending Social Security to the Poor

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